Claim No: CFI 001/2014
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BEFORE H.E. JUSTICE OMAR AL MUHAIRI
YOUSSEF ISSA WARD
DAMAC PARK TOWERS COMPANY LIMITED
ORDER OF H.E. JUSTICE OMAR AL MUHAIRI
UPON reviewing the Claimant’s Application Notice CFI 001/2014-01 dated 5 May 2015 seeking a Court Order for an injunction or declaratory relief (“the Application”)
AND UPON reviewing the Defendant’s response to the Application dated 12 May 2015
AND UPON reading the relevant material in the case file
AND UPON hearing Counsel for the Claimant and Counsel for the Defendant in the hearing on 13 May 2015
IT IS HEREBY ORDERED THAT:
- The Defendant shall return the cheque number 000129 from Mashreq Bank, account number 0494331770 in the amount of AED 448,815 to the Claimant.
- The Claimant is awarded 50% of their costs of the application, to be assessed by the Registrar if not agreed.
- Liberty to apply.
Date of issue: 25 May 2015
- On 5 May 2015, the Claimant filed Application Notice CFI 001/2014-01 seeking an order for an injunction and/or declaratory relief on an expedited basis pursuant to RDC 25.11 that the Defendant be prohibited from pursuing any criminal proceedings in relation to the DIFC Proceedings in CFI 001/2014 and that the Defendant is compelled to withdraw any criminal charges it has made against the Claimant arising out of the facts of the Proceedings and that a fine be imposed on the Defendant for being in contempt of court.
- On or around 22 April 2015, the Defendant made a complaint with the Dubai Police alleging that the Claimant failed to honor a cheque, dated 28 February 2011 bearing cheque number 000129, from Mashreq Bank in the sum of AED 448,815 (the “Cheque”).
- On 29 April 2015, the Claimant was arrested at Dubai International Airport and was taken into custody at Bur Dubai Police Station where he was released several hours later and the charges laid against him by the Police Station included a charge of “representation of a cheque without balance with bad intention.”
- It is the Claimant’s contention that the Defendant is in contempt of court and in breach of Article 43 of the DIFC Court Law as the complaint to the police by the Defendant is an act which intends to interfere with the administration of justice, including interfering with the Proceedings; and/or an abuse of process and/or an attempt by the Defendant to deprive the Claimant of his liberty in order to put him under duress and force him to compromise his claim.
- A hearing was conducted before me on 13 May 2015 between Counsel for the Claimant and Counsel for the Defendant where both parties put forth their respective arguments.
- During the hearing and in their reply to the Claimant’s Application for a Court Order, the Defendant contends that the Court does not have jurisdiction to make orders in respect of criminal matters, nor does it have jurisdiction to prohibit a person from pursuing a right to make a criminal complaint under UAE Federal Law nor can the Court compel a person to withdraw a criminal complaint which has been made in accordance with and pursuant to UAE Federal Law.
- It is clear to me that this application is essentially a claim for an anti-suit injunction and in my view, it is not appropriate for this Court to grant the anti-suit injunction sought. This Court has no jurisdiction to prevent anyone, including the Defendant, from commencing criminal proceedings before the Dubai Police, Public Prosecution or the Dubai Criminal Court. However, it is important to note that they will consider my judgment on this case to be binding. That said, it is sensible to conclude based on my prior judgment that the Defendant must return the cheque to the Claimant.
- Paragraphs 30 and 31 of my Judgment issued on 10 May 2015 deal with the Cheque and state:
“30. The Claimant also provided a third cheque dated 28 February 2011 in the amount of AED 448,815 which was first presented for payment on 28 March 2011 and dishonored due to insufficient funds. It was presented for payment again on 4 April 2011 and bounced again due to insufficient funds.
31. According to the Defendant, the Claimant breached the Reservation Agreement when his last cheque was presented for payment and dishonoured by his bank due to insufficient funds and as such, the Second Termination Notice became effective on 21 April 2011 and the Defendant was entitled to and did validly terminate the Reservation Agreement and retain the AED 1,346,445 paid towards the Unit pursuant to Clause 4 of the Reservation Agreement.”
The Judgment later disputes the Defendant’s argument above and presents the conclusion reached on the issue of the Cheque in paragraphs 71-75 which state:
“71. According to the Defendant; as part of the revised Payment Plan, Damac received two payments in October 2010 totaling AED 1,346,445. The last cheque for AED 448,815 was dishonoured by the Claimant’s bank due to insufficient funds when it was presented for payment on 28 March 2011 and again on 5 April 2011. As the Defendant contends, it was due to this failure to fulfill the obligations under the Reservation Agreement by the Claimant that the Defendant issued the Second Termination Notice on 22 March 2011.
72. According to the Claimant, the Second Termination Notice was invalid because it was ineffective as notice of termination for the purposes of Article 87 of the DIFC Contract Law in that it failed to refer to the document which was said to form the contract between the Claimant and Defendant; referred to a letter dated 13 June 2010 that didn’t exist or was never sent to the Claimant, failed to specify the sums due to Defendant, failed to specify the basis on which those sums were calculated and failed to specify the basis on which the Defendant was lawfully entitled to terminate the Contract.
73. It is my position that the Second Termination Notice was invalid, but not due to the reasons listed by the Claimant. At the time the Defendant issued the Second Termination Notice on 22 March 2011, the Claimant paid a total of AED 2,626,335 or approximately 58% of the Purchase Price.
74. In view of the fact that the Payment Plan did not operate as a new agreement or a variation of the existing Reservation Agreement, one must look to the installment payments set out in the Reservation Agreement. Accordingly, the Claimant owed AED 1,136,000 by 26 April 2010 (which was paid); AED 1,363,200 by 25 July 2010 (which was paid, albeit not on time); and AED 2,044,800 upon completion. Absent a completion notice of the Unit, the only amounts due to Damac at the time the Second Termination Notice was issued was the 2nd and 3rd installments of AED 1,136,000 and AED 1,363,200, respectively. Accordingly, the Claimant was not in breach of the Reservation Agreement.
75. Consequently, the Defendant’s termination of the Reservation Agreement was invalid and constituted wrongful termination of the contract.”
- I concluded that the Second Termination Notice was in fact invalid and constituted the wrongful termination of the contract. This implicates the Cheque in question. At the time the Cheque was presented for payment, the Claimant paid a total of AED 2,626,335 or approximately 58% of the Purchase Price. The Cheque should not have been presented for payment to begin with. Accordingly, the Cheque should be returned to the Claimant.
- It is important to note that although the Cheque is made out to Damac Properties Co. LLC, the Defendant’s representative at the hearing confirmed that the Cheque was in fact to be made out to and used for the Park Tower project, not Damac Properties Co. LLC generally; and that the Cheque was a continuation of the installment payments agreed upon by the Parties as laid out in paragraphs 30 and 31, above.
- As for the abuse of process argument put forth by the Claimant, I agree with the Defendant in that this Court does not have jurisdiction to make orders in respect of criminal matters and cannot stop individuals from pursuing criminal complaints under the UAE Federal Law. Indeed, the Dubai Courts have the jurisdiction to hear and determine the offense in question under Article 401 of the UAE Penal Code. As for the contempt of court argument, the Claimant has failed to put forth a viable contempt of court argument whether at the hearing or in its skeleton argument. The Defendant filed his criminal case against the Claimant on or around 22 April 2015, before my judgment was issued. Additionally, the fact remains that this Court does not have jurisdiction to handle criminal proceedings and no order was issued from this Court directing the Defendant to refrain from seeking criminal proceedings in the Dubai Courts.
- Notwithstanding this, it is relevant to mention that the Criminal Court will consider my judgment as binding when dealing with the issue of the Cheque, and it is fair to conclude that the criminal judge will rightly apply Article 401 with no bad intention from the Claimant in issuing the Cheque.
Date of issue: 25 May 2015